Mumbai: Wealth managers and strategists have one message for investors sitting on hefty gains from the tearaway rally in gold and silver: take money off the table. With both the precious metals having more than doubled in the past 18 months in a record-breaking run-up, pulling in a wave of new investors, the risk-reward may be stretched to hold an outsized bet, they said.

“If you bought gold and silver over the past year and a half, this is the time to take profits and be a fence sitter,” said Sahil Kapoor, head – Products, and market strategist, DSP Mutual Fund.

Over the past 18 months, gold has been up 101% in dollar terms and 116% in rupee terms. Silver has surged 167% in dollar terms and 198% in rupee terms.

While international silver has dropped 36.63% and gold is down 7.8% from their recent lifetime highs in January 2026, the lower prices may not warrant major fresh allocations at this juncture.

“Precious metals are priced to perfection after the sharp run-up in prices we saw over the last couple of years,” said Akshay Chinchalkar, managing partner and head of strategy, The Wealth Company. Chinchalkar recommends waiting for a “big crack” before deploying lump-sum funds and prefers that investors use Systematic Investment Plans (SIPs) – a staggered form of deployment – to build gold exposure.

Gold and silver have rallied mainly on safe-haven demand, driven by simmering geopolitical tensions, aggressive US trade policies, inflationary pressures and sustained central-bank buying. Silver’s surge, however, goes beyond its role as a store of value: the metal’s expanding industrial demand – from solar panels and electric vehicles to AI-related technologies that have seen swelling investment in recent years – has also fuelled its rise.
The strong rally prompted Indian investors, deprived of gains in equities here, to pump record sums over the past couple of months. Monthly inflows into gold and silver schemes topped equity funds for the first time in January. Precious-metal ETFs drew ₹33,503 crore during the month – more than double December’s ₹15,600 crore and higher than ₹24,029 crore into equity schemes. Flows into equity mutual funds dipped 14% in January from the previous month. Investors would be better off not crowding into these products, said strategists.

“New investors should not enter with large weights or allocate fresh funds at this time. At best, to avoid FOMO (Fear of Missing Out), start a token SIP, if you can’t control your urge to participate,” said Kapoor.

The recent surge in select public sector stocks has sparked fresh debate about whether the rally is sustainable or merely a short-term burst driven by liquidity. While defence and power continue to draw interest, experts remain cautious on oil and gas and structurally wary of long-term prospects in IT.

A sharp move in Engineers India has been one of the talking points, with the stock posting strong gains over consecutive sessions. Market expert Dharmesh Kant from Cholamandalam Securities noted that the recent action appears more technical than fundamental.

“This is just some MNC brokerage report and some buying. Small buying can spurt the stock price and there are no sellers. We are not interested in the space because exploration and production of oil and gas is headed for a sunset over the next 10-15 years. Trades can happen in between, but long-term traction cannot be built on yesterday’s stock price action.”

Defence Emerges as a Preferred PSU Theme

Defence remains a standout theme for long-term investors. Kant highlighted that execution concerns are overstated, given robust order books and improving delivery timelines.

“The only space which looks attractive to me is defence. Execution issues are not a problem. Hindustan Aeronautics has a robust order book, and Q3 numbers exceeded expectations. Over the next two-three years, these companies will surprise on execution and margins. HAL could post 32-33% operating margin with 15-20% revenue and PAT growth. Defence is a play we like. Power is another—projects are commissioning and FY27 PAT growth could be 30-33%.”
Order Books Seen as Strength
Large defence order books provide predictable revenue streams. Kant explained:
“Order books are given by the Government of India and ensure better revenue and profitability. BEL’s PAT grew 20% this quarter. Execution cannot exceed 15-17% in any capital goods company, and they are delivering. Concerns about large order books are misplaced.”
IT: Tactical Opportunity, Structural Concerns
On the technology front, short-term trading opportunities exist, but structural growth challenges remain:

“Indian IT companies’ contribution in Nifty 50 earnings dropped from 22% in FY20 to 11% in FY25. Growth has lagged due to multiple factors. There could be a bounce in the next two to four months as Q3/Q4 numbers come in, but from a long-term perspective, we do not recommend IT stocks.”

The Bottom Line
Investors are urged to differentiate between tactical momentum and structural opportunity. Defence and power offer visibility backed by policy and execution, oil and gas exploration faces headwinds, and IT presents short-term trading potential but long-term uncertainty.

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